On July 1, 2021, the Federal Trade Commission settled a complaint brought under the Children’s Online Privacy Protection Act (âCOPPAâ) against Toronto-based Kuuhuub Inc. and its Finnish subsidiaries Kuu Hubb Oy and Recolor Oy, operators of the online coloring book application Recolor. The FTC alleged that app operators violated the COPPA rule by collecting and disclosing personal information about child users of the app without first notifying their parents or obtaining verifiable parental consent.
The Recolor app provides images that users can digitally color in on their mobile devices and social media features that allow users to upload images for others to view, comment on, and like. To access social media features, users must create an account providing an optional email address, screen name, and profile description and photo. In its complaint, the FTC alleged that while the app was touted as an “adult coloring book,” part of the app was aimed at children, making the app subject to COPPA. The FTC alleged that some children, including those under the age of 13, were able to create an account with the app and use the app’s social media features. According to the complaint, operators have received numerous complaints from parents concerned about their children’s use of the app’s social media features to interact with adult users. The FTC also alleged that Recolor allowed third-party ad networks to collect personal information about children (in the form of persistent identifiers collected via cookies) and did not ask ad networks to refrain from using this data for the purposes of online behavioral advertising.
Under the settlement, the operators agreed to a penalty of $ 3 million, which will be suspended from payment of $ 100,000 due to their inability to pay the full amount. Operators must also comply with COPPA; delete all personal information previously collected from children under the age of 13, unless they obtain COPPA-compliant parental consent; offer refunds to paid app subscribers who were under the age of 18 at the time of registration; and implementing a pop-up alert on the settlement to be displayed to all users of the application.